Shutdown cuts subsidies for low-income, senior, disabled housing

Gary Warth

The federal shutdown has stalled subsidies for hundreds of residential units for the needy, disabled and seniors in San Diego County. Affected properties include Cantebria Senior Homes in Encinitas (above), where a HUD contract for 44 units will expire Jan. 31.

The federal shutdown has stalled subsidies for hundreds of residential units for the needy, disabled and seniors in San Diego County. Affected properties include Cantebria Senior Homes in Encinitas (above), where a HUD contract for 44 units will expire Jan. 31. (Gary Warth)

Gary Warth

Federal subsidies that helped pay the rent at hundreds of local housing units for the needy, seniors and the disabled have not come through this month because of the partial federal government shutdown.

Nationwide, about 1,150 contracts between property owners and the U.S. Department of Housing and Urban Development expired Jan. 1 after missing their renewal dates because of the shutdown. Up to 85,000 low-income households were covered in those contracts, according to the National Low Income Housing Coalition.

In San Diego County, contracts have expired at seven properties with a total of 299 subsidized units. Another 74 units will lose their subsidies when contracts expire at three more properties Jan. 31, and 24 more units will lose their federal funding when contracts expire at three more properties Feb. 28.

The expired contracts are for housing vouchers reserved for specific units, which make up a small fraction of the federally subsidized housing in San Diego County.

Most San Diego County residents in HUD-subsidized housing receive a type of housing voucher that can be used at any property where they are accepted, and HUD has said those will be funded through the end of February.

The San Diego Housing Commission oversees 15,000 such Section 8 vouchers and San Diego County Housing and Community Development oversees 10,400 Section 8 vouchers. Tenants with the vouchers pay no more than 30 percent of their income on rent, and HUD pays the difference.

Among local residential buildings with expired property-based voucher contracts are Cathedral Plaza in downtown San Diego, which has 172 subsidized units, and Oxford Terrace in Chula Vista, which has 22 subsidized units. Both are managed by Royal Property Management Group, owned by Wendy King.

“It could have been a disaster, but it’s not been yet,” King said.

Royal Property Management Group is large enough to absorb the missing subsidy for now, King said, adding that small rental properties would face more of a challenge.

“We’re OK for the month, but it’s month-to-month,” she said.

HUD sent letters to landlords who have with project-based vouchers around the country, urging them not to evict tenants but to instead cover the rent with reserve funds.

King said she hasn’t been able to do that because dipping into the reserve requires permission from HUD. With 95 percent of HUD staff furloughed, King said she does not know how the agency would process the request.

She said she does not believe HUD would allow people to be evicted because money was held up by the shutdown.

“Let’s just see how long this goes,” she said.

Besides the Royal Property Management Group properties, Section 8 voucher contracts also have expired for 148 units at Columbia Tower in San Diego. On Feb. 28, Section 8 voucher contracts will expire for 12 units at Euclid Avenue Apartments in San Diego.

According to the National Low Income Housing Coalition, contracts for subsidized low-income senior housing already have or soon will expire for the 69 units at Villa Alta Apartments in San Diego, 30 units at COMM 22 in San Diego and 44 units at Cantebria Senior Homes in Encinitas.

Contracts also have expired for small projects that provide homes for low-income disabled people. In San Marcos, the contract for the 12-unit Project Roher has expired, as have contracts for the six-unit Grace House and six-unit Parham House, both in Vista.

More subsidies to house low-income disabled people could stop Feb. 28 when contracts expire at the six-unit Mar Vista House in Oceanside and the six-unit Teton House in El Cajon.

National Low Income Housing Coalition President and CEO Diane Yentel said some property owners will be able to make it through the shutdown by using their reserve funds, but not all have that cushion.

Of property owners who have contracts for subsidized low-income senior housing, for instance, 92 percent have said they have sufficient reserves to make it through a few months, but the remainder do not, Yentel said.

While there haven’t been any reports of people being evicted because of the shutdown, Yentel said she has heard that some landlords have turned away possible tenants with vouchers because of the uncertain funding.

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